Gold prices plunge (13 month low) on recession fears, dollar gain (does that make sense to you?)

[MikeWB]

Just saw this story on newmogul.com... so let me copy it here and  briefly comment on it.

I've answered few PMs and emails on this topic. The reason why I don't recommend gold and why I recommend everyone to stay out of gold market is because the gold market is the most manipulated market in the world! It's controlled by less than 8 entities that can move the price of gold by virtually any percentage in any direction the choose. If the gold were not being manipulated, it would be a good buy. But the fact is that gold is NEVER going to keep its true value in your investment portfolio because the gains can be easily wiped by manipulation.

Biggest recession fears, stocks falling, DOW down 300pts, gold production slowing down, mints have no gold to produce coins and the price of gold is down to 13th month low and briefly touched 21 month low today... does that make ANY SENSE to you??? This is the reason, my friends, why I stay out of this market.

Gold prices plunge on recession fears, dollar gain

By STEVENSON JACOBS
MORE FROM BUSINESSWEEK
NEW YORK

Gold prices collapsed Wednesday, plunging to a 13-month low as a stronger dollar and growing fears of a global recession spurred investors to yank money out of commodities.

A barrage of worrisome corporate earnings has deepened investors' pessimism about the direction of the economy, prompting them to shift funds into less risky assets like government bonds. At the same time, a sharply stronger dollar is feeding selling of commodities bought as a hedge against inflation and weakness in the U.S. currency.

Gold for December delivery fell $32.80 to settle at $735.20 an ounce on the New York Mercantile Exchange, after earlier dipping to $720, the lowest level since Sept. 4, 2007.

"We have now come full circle .... The remaining question now emerging is: has gold seen its lows, or are we at the start of a phase in the mid-to-high $600s? There is plenty of uncertainty on that front," Jon Nadler, analyst with Kitco Bullion Dealers, said in a note.

Other precious metals also tumbled. December silver fell 61.5 cents to settle at $9.46 an ounce on the Nymex, while December copper dropped 14.15 cents to settle at $1.8655 a pound.

In energy trading, oil prices fell below $67 a barrel to 16-month lows Wednesday after the government reported big increases in U.S. fuel supplies -- more evidence that the economic downturn is drying up energy demand.

Light, sweet crude for December delivery fell $5.43 to settle at $66.75 on the Nymex, after falling as low as $66.20. It was the lowest close for a front-month contract since June 13, 2007, when crude settled at $66.26.

In other Nymex trading, heating oil futures fell 14.13 cents to end at $2.0562 a gallon, while gasoline prices dropped 12.1 cents to finish at $1.5709 a gallon.

Meanwhile, agriculture futures fell on the Chicago Board of Trade.

Wheat for December delivery lost 31.25 cents to settle at $5.1775 a bushel, while December corn fell 26 cents to settle at $3.85 a bushel.

December soybeans lost 50.5 cents to settle at $8.6475 a bushel.

Falling commodities prices have come at heavy cost for producing countries. In Argentina, the steep pullback in the price of soy, wheat, corn and beef have slashed export income, a key source of government revenue.

In a surprise move, Argentina said Tuesday that would nationalize $30.1 billion in private pension funds in response to the global fiscal crisis.

[joeblow]

It makes perfect sense to me: 1. Gold is of course manipulated, but other than Guns and Butter, what commodity is better? 2. If all other major currencies are weakened, by other countries debasing their own money, then the dollar will raise relative to them.

[Ognir]

I have physical gold rather than paper gold, it's when things hit the fan

Money Has No Value

[MikeWB]

Neither does  gold, Og. The thing that will have value is stuff you can put on your plate.

joe... point 2., yes, that's correct. That's how USD is showing only few points of inflation.

[Ognir]

Mike we will use gold before we have to use barter
the world wouldn't end in a single day
but in stages we will
and we'll be back to communism on a global scale
run by our friends of course

[MikeWB]

Here's the best & safest investment: Go to a farm and make a deal with some farmer to give you a portion of his crop and pay in advance. I now get organic food weekly from a farm and I've paid 6 months in advance with an option to extend the deal. It's working well.

As for currency, we'll see the rise of local currencies before we see a trade in gold. Sure, a gold coin will get you out of the trouble when you're cornered and need to escape the area but it won't be used for barter.

I suggest people have about 10 maple leafs in a money belt for emergencies but don't plunge your savings into gold.

[Roy Hobs]

Not to worry folks..................

Daryl (DBS) told me personally that Gold is going through the roof by Christmas.

[equilibriummike]

It is true that everything especially gold can be manipulated by the money changers, but if I have a choice between the fraudulent Federal Reserve notes (US dollars) and gold, i'd pick gold.

[Anonymous]

Here's the best & safest investment: Go to a farm and make a deal with some farmer to give you a portion of his crop and pay in advance. I now get organic food weekly from a farm and I've paid 6 months in advance with an option to extend the deal. It's working well.

As for currency, we'll see the rise of local currencies before we see a trade in gold. Sure, a gold coin will get you out of the trouble when you're cornered and need to escape the area but it won't be used for barter.

I suggest people have about 10 maple leafs in a money belt for emergencies but don't plunge your savings into gold.

Good for you Mike, glad to hear you have a nice thing going.  And I would recommend people to do the same if they are able to.  Get onto a more healthy diet (not imported crap that who knows what is in it) and support your local producers.  Local economic survival is where things need to go!

If you live in a city, well chances are you cannot do that.

But for a future hard times assurance of survival, the farmer could break the deal if he is having a hard time to survive himself.  There is no guarantee the agreement will be upheld in that case.  I hope you are storing much food in case such an eventuality does occur.

Things of actual value are worth more than a piece of mineral/metal/etc (food, tools, self-perpetuating technology i.e. solar panels).  With that said, if you cannot store food, or have a means of ensuring the necessary material for your survival in hard times, a form of barter is necessary to get the stuff you will need.  People put value in gold, silver, etc.  But if they do not then you will not be better off.  That is why something of actual tangible value like a shovel or axes is a much better bartering commodity.  I'm sure other smaller material can be thought up, but I hope my point is getting across...  What can you do with gold other than exchange it for something that can help ensure your survival?  If things get bad, and you had shovels, axes, food, water purification, etc, would you accept some chunk of metal for that valuable stuff you have?  I wouldn't.  Gold isn't going to get me anywhere when I need to fend for myself in the environment.  But I would definitely pick a piece of metal over a piece of paper!  Unless I needed something to wipe my bum after a #2... LOL

What are these 'maple leafs' you are talking about?  I have maple trees everywhere, am I rich (LOL)?  Please elaborate.

[MikeWB]

AZiXx, if I total my grocery store bills and I compare them with what I'm paying former, I get about 20% discount. Now mind you, I have a 4 person family. It's not only economical but also healthier since I've talked to this farmer many times and know how he cultivates the earth etc. The only think is convenience... he's about 40 min away from the city so it takes a while to get there... that's why I make once a week trips (on Sundays) to pick up my food. This is minor inconvenience. I'm pretty sure that anyone here can do the same: take a map of your city and surrounding places and pick a small town that's 30-60 min away and just go there and find a farm. Talk to few farmers and pick someone to be a provider of your food. And I doubt that farmers will ever go hungry and not have food to spare... chickens and cows will continue breeding .

Maple Leaf is a gold coin, bullion, that's produced by Canadian Mint. It's famous for being the PUREST gold coin you can buy! http://en.wikipedia.org/wiki/Canadian_Gold_Maple_Leaf  It's in a class of its own. Old Krugernads came close but maple leaf is much purer. So people who know gold, they prefer them to all other ones.

[mobes]

In a total systemic meltdown, gold may not be the answer. However, the price of gold is strictly manipulated via the central banks debasing their currencies worldwide. In this time of financial crisis, what is not being talked about is the upcoming food crisis. I'll address these issues on my next show. Because if we don't start laying down some concrete solutions, we'll be screwed.... :!:  :!:  :!:

[Rockclimber]

The most f'ed up part about this is they will not even let gold rally. This just shows how vicious these people truly are.

And of course this does not make a bit of sense, metals should be soaring.

I have an old article btw that suggests the Rothschilds own a sizable portion of the worlds gold. When they are ready they will dictate the retreat to gold as the currency of last resort on their terms.

If we have a complete economic meltdown here in the states personally, food and water will be the gold but you would have to guard it preciously and to that I say good luck.

George Gordon has some pretty good ideas on how to make it through these troubled times:

20 Small Private Businesses

If interested, seven 1-hour shows. I started listening to a few, he has some decent ideas but he is a silver/gold guy too. But he does generate some good ideas:

http://www.georgegordon.org/A/P/0305a-32.mp3
http://www.georgegordon.org/A/P/0305b-32.mp3
http://www.georgegordon.org/A/P/0305c-32.mp3
http://www.georgegordon.org/A/P/0305d-32.mp3
http://www.georgegordon.org/A/P/0305e-32.mp3
http://www.georgegordon.org/A/P/0305f-32.mp3
http://www.georgegordon.org/A/P/0305g-32.mp3

[CrackSmokeRepublican]

The Dollar's Death rally is likely short lived. After all the  Hedge Fund Yen-Carry Trades are unwound, the dollar will go straight to the hyper-inflationary toilet.

GE Capital is likely gone now too. This is and a few other HF blowups are causing a massive Global Fright right now.  Once this subsides, the world is going to trash the dollar and base their trades on another currency. The Asians and Europeans are meeting this weekend to hash out the next global currency, likely backed by a hard metal. Some hint it may be a basic of currencies based on the Yuan, Islamic Dinar and German Mark.  Hard to tell what sticks.  Sarkozy is trying to conjure up something in the shadows which isn't a good sign since it means the Jew hand will still keep a finger of control.